Currently, New Yorkers in the lowest income bracket pay the same tax rate of 6.85 percent as those in the highest bracket.

The new agreement calls for residents making more than $300,000 but less than $500,000 to pay an income tax rate of 7.85 percent. New Yorkers making more than $500,000 would pay a rate of 8.97 percent.

Dan Cantor, executive director of the Working Families Party, reveled in the news, although he said he would have liked to see another, higher tier added for residents making more than $1 million.

"We wish they had gone even further, but a catastrophe has been avoided because the Legislature had the good judgment to require the wealthy to pay their fair share," Cantor said. "We'll be very glad we did this in a couple of years when the stimulus money runs out."